Brexit options: impact on copyright

As the UK parliament prepares for the imminent “meaningful vote” on the Government’s Brexit deal, the British Copyright Council looks — as far as possible in light of shifting political developments — at what the potential outcomes might mean for the creative sector.

What we already know
The UK’s membership of the European Union ends at 11pm BST on 29 March 2019, if there is no extension agreed by all EU member states or a unilateral revocation of the Article 50 by the UK government.

When membership ends, the UK will either be in a transition period or completely out.

Whatever happens, the UK remains bound by the various international copyright treaties to which it is a signatory (eg the Berne Convention, TRIPS and the WIPO Internet Treaties 1996). This means UK copyright works will continue to be protected across the world, including in the EU.

The options
While a number of options — such as membership of the European Economic Area, the European Free Trade Association and the Customs Union, or no Brexit — remain theoretically available to the UK (if agreed by other states), we summarise the impact on the creative sector of the two most discussed options: the Government’s Brexit deal or leaving with no deal (aka WTO rules).
Option 1: Approval of the Government’s Brexit deal
Subject to all the imponderables concerning Brexit, approval of the Government’s proposed deal is unlikely to lead to significant changes to the UK copyright regime in the short to medium term.

The European Union (Withdrawal) Act  2018 provides for EU laws that have already been incorporated in UK law, such as the EU Copyright Directives, to be retained.

The Government’s Brexit deal also addresses the “exhaustion” of IP rights, ie the point at which a right holder no longer has control over the further commercial distribution of a copyright product (such as the reselling or lending of a book or CD) once it has been legally placed on the market in a certain territory. Article 61 of the deal states that rights that are exhausted both in the EU and in the UK before the end of the transition period shall remain exhausted in both regions.

Alongside the draft deal, the political declaration setting out the framework for the future relationship between the EU and the UK refers to the protection and enforcement of IP rights beyond multilateral treaties to stimulate innovation, creativity and economic activity.

Option 1 therefore seems to continue the close relationship between EU and UK copyright law.

 

Option 2: No deal
In the event of a “no deal”, the UK will leave the EU on 29 March, with no transition period.

The Government has published two regulations in the area of copyright in case of a no-deal scenario:

  1. The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations
    Certain cross-border copyright arrangements will no longer operate effectively when the UK falls outside the EU. Thisregulation therefore aims to correct these deficiencies — for example by amending references to the EU and EEA in the UK’s Copyright, Designs and Patents Act.
    It also addresses issues around reciprocity or mutual recognition within the EU/EEA, which would end when the UK leaves the EU. One example is the mutual recognition throughout the EU of the status of “orphan works” — copyright works for which the right holder cannot be found. This will be UK-only after a no-deal Brexit.
  2. The Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations These state that the UK will continue to recognise the EEA regional exhaustion regime after exit day to provide continuity in the immediate term for businesses and consumers. This means there will be no change to the rules affecting imports of copyright goods into the UK. However, there could be restrictions on goods going from the UK to the EEA. These Regulations require further consideration as to its practical impact.

If the UK leaves without a deal, trade with the EU will immediately operate on WTO rules. The UK is already a member of the World Trade Organisation in its own right (it has dual membership as part of the EU). However, WTO members need to agree schedules containing the tariffs (taxes on imports of goods) and quotas (limits on the number of goods). Notably, these tariffs and quotas are subject to the “most-favoured-nation” rule aimed at preventing discrimination of market access for specific WTO members (but this rule does not apply between countries that have a free trade agreement, such that between EU member states and between the EU and other trading partners). Currently, the WTO tariffs on copyright goods such as CDs and books are generally zero.

 

Conclusion
Leaving the EU does not require the UK to change its copyright regime but — as was noted in the BCC’s 2017 paper “Impact of Brexit on UK Copyright Law” — it might choose to do so once no longer bound by EU copyright law or the rulings of the Court of Justice of the European Union. It is nevertheless required to maintain the benchmark protections found in international treaties and it is hoped the Government is committed to safeguarding the UK’s gold standard copyright regime that is vital for sustaining the creative sector, now worth around £100bn a year to the UK economy.

Written by Florian Koempel, 11 January 2019

Copyright artwork by Beth Walrond


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